Volvo stands by Australian market & electrification

VOLVO has reaffirmed its commitment to the Australian market and within that, electrification with the Swedish brand still on track to launch a dedicated battery-electric vehicle (BEV) each year for the next five years.

Speaking exclusively with GoAuto, Volvo Australia managing director Nick Connor said he would love to see more incentives from the federal and state governments to help increase the uptake of EVs in Australia, especially in comparison to other international markets.

“Electrification has not taken off in the same way here as it had in a lot of other markets around the world,” he said.

“That said, our plug-in hybrid (PHEV) variants are doing really well – we can sell all the PHEVs that we can get … they are being very well received and I think it’s a first step in this marketplace.

“We would love to see a bit more incentive from the federal government and individual states to encourage the take-up of electrified vehicles, but I think it’s really interesting that even without some of the incentives that exist elsewhere in the world that there is still a very significant demand for PHEVs.”

According to Mr Connor, PHEVs occupy around 25 per cent of the brand’s European sales while in Australia that number slips to between six and nine per cent “depending on the model”, however the local figures are reportedly on the rise after the brand rounded out the first phase of its electrification strategy with the release of its XC40 Recharge PHEV small SUV earlier this year.

“The focus that we need to have here is – it’s about the experience rather than necessarily the tax savings that you get elsewhere in the world,” he said.

“What we’ve seen over recent years is that most people who have bought a PHEV, they don’t go back (to a purely internal combustion engine) … and I think what it will do is then give people the confidence to move on to BEVs.”

Not ones to waste any time – especially given Australia is a ‘deep water’ market – Volvo is set to launch a dedicated BEV version of the XC40 Recharge next year, kickstarting the local subsidiary’s march towards introducing five new EVs over the next five years.

That said, Volvo’s goal of EVs making up 50 per cent of all its sales by 2025 may take a little longer to be realised here.

“A lot depends on incentives, they (EVs) are more expensive vehicles,” Mr Connor said.

“The batteries are expensive but they’re cheaper to run and obviously you’ve got much longer distances that can be covered in cars here than you have in mainland Europe for example.

“I would like to maximise our BEV performance in Australia as much as we possibly can but I think we have to accept that 50 per cent is a big ask.”

While being a big ask, Mr Connor did not write off the goal as being impossible and said that more education work had to be done, especially in regard to addressing and mitigating range anxiety.

“I think it’s really about telling people the whole picture around EVs and explaining you can’t just look at the lump sum purchase price, you have to look at the whole life cost of the car,” he said.

“I think what will happen actually is that fleet operators will get onto the benefits of EVs probably quicker than a lot of consumers and they’ll buy on the basis of cost savings and the fact there are environmental benefits.”

Once the XC40 Recharge BEV launches next year, it will be followed (globally) by an all-electric version of the new-generation XC90 large SUV with the BEV set to be the first variant of the new generation to roll off the production line.

As for whether or not the BEV will be the first new-gen XC90 variant to arrive Down Under remains to be seen, as does the now belated arrival of Polestar which was forced to delay its launch Down Under until next year due to the ongoing COVID-19 pandemic.

Looking beyond the introduction of the next XC90, Mr Connor quelled any possibility of a Volvo ute coming to fruition but reiterated the brand’s fierce commitment to the Australian market.

“We haven’t got plans for a ute – it’s a market that’s big in Australia and the US but it’s not terribly big anywhere else,” he said.

“We’d love to have one in Australia but unfortunately that’s not in our cycle plan.

“Volvo is fully committed to the Australian marketplace; we see it as a growth opportunity for Volvo as a brand … we are intent on growing here.

That intent has yielded results in recent years with the Swedish brand’s market share gradually growing from around 0.6 per cent to 0.8 per cent as of the end of September this year, a figure it has maintained since June.

Despite the crippling effects of COVID-19, the marque has managed to contain the damage to finish September less than 500 units down on the same time last year (5291 vs 5785) with Mr Connor targeting a “reasonable” 10,000 sales per year for the “short term”.